Groups seek moratorium on U.S. LNG exports

Thursday, March 14, 2013

A coalition of environmental groups is urging the White House to postpone approvals of liquefied natural gas export facilities until potential negative consequences of gas sales on the economy, environment and trade are thoroughly studied and addressed.
In a letter to President Obama, the environmentalists expressed concern that natural gas exports will raise domestic energy prices, harm workers and U.S. manufacturers, exacerbate global warming and lead to intensified fracking activity to extract the gas from shale rock formations.
Fracking, or hydraulic fracturing of shale, has been used during the past five years to develop previously inaccessible oil and gas fields. The technological breakthrough will soon turn the United States into one of the largest producers of oil and gas in the world, after decades of being a net importer of fossil fuels. The new supplies of gas have significantly lowered domestic U.S. gas prices the past couple years, causing utilities to switch to gas from coal and helping manufacturers with cheaper feedstocks and energy to run their plants. The transportation sector, including trucking, freight rail and ocean shipping, is also conducting trials with LNG engines to power conveyances more efficiently with less emission of carbon and other harmful gases.
Environmental groups argue fracking, which involves injecting large amounts of water and various chemicals into rock fissures, is damaging to the environment, including groundwater. Although natural gas burns cleaner than coal, gasoline and diesel fuel, the drilling and production of gas results in large releases of methane, which is a much more potent greenhouse gas than carbon, according to some scientists. The combination of methane with the increased energy needed to produce and transport natural gas makes it the most carbon-intense form of energy from extraction to consumption, the environmentalists said.
Domestic natural gas is trading at about $3.50 per million British thermal units. In Europe, the price of gas about $12 per unit. European utilities are among those keen to buy U.S. gas.
The Department of Energy is currently reviewing 16 proposals for LNG export facilities. If they are all approved, they could export 45 percent of the natural gas produced in the United States, according to the Sierra Club and other environmental groups.
Their letter warned that the preliminary Trans-Pacific Partnership trade agreement being negotiated with 10 other nations doesn't give the United States any power to condition or deny export licenses to TPP markets. Japan, the world's largest natural gas importer, is considering joining the TPP talks. Negotiators on Wednesday completed the 16th round of talks for a regional trading bloc, with the goal of reaching a comprehensive agreement by the end of the year.
"Deciding whether and how to move forward with LNG exports is among the most pressing environmental and energy policy decisions facing the nation. Yet, to date, DOE has failed to seriously analyze or respond to the significant national risks and implications of LNG exports," the letter said. "DOE has undertaken no environmental analysis of the major increases in natural gas production and shifts in use that would result from export. Moreover, the economic study DOE commissioned discounts the harm that LNG exports would inflict on the poor and middle class due to lower wages and higher utility bills. DOE needs to fully evaluate and disclose these serious impacts. Doing so is particularly urgent at this moment, given that pending trade negotiations may inadvertently cost the United States its ability to manage LNG exports to a significant number of countries." - Eric Kulisch